The Nevada Legislature has enacted a very powerful statute designed to provide support to surviving spouses and minor children when the gross estate is less than $100,000 (after deducting encumbrances) and avoid paying most, if not all creditors. NRS 146.070 provides that if a person dies with a spouse and no children, leaving a gross estate less than $100,000, the entire estate must be set aside for the support of the surviving spouse. The statute operates similarly for the support of a minor child in the event the decedent is not married and leaves only a minor child or children. This statute directs the decedent’s inheritance to the surviving spouse or minor children even if the decedent left a will leaving the estate to someone else.
This statute can allow heirs to avoid a long and costly probate process in the event that a proper estate plan is not implemented or assets are not titled appropriately at death. This statute can also be utilized by surviving spouses and guardians of minor heirs to avoid having to satisfy creditors such as credit cards, hospital bills, and other non-secured debt.
For example, if a married person with no minor children dies leaving a house titled solely in the decedent’s name, the value of which is $400,000, but has an encumbrance of $210,000, and the asset is community property, the equity in the house is $190,000, however only 50% of the value is subject to probate. Therefore, the net estate is only $95,000. Even if the decedent had $100,000 in separate debt such as student loans, NRS 146.070 provides that the entire estate, i.e. the entire house and all of the equity therein, shall be set aside for the support of the surviving spouse.
By utilizing Nevada’s community property laws and applying Nevada’s support statute in concert, even when an estate initially appears substantial, and probate seems unavoidable, surviving spouses can avoid lengthy and costly probate proceedings and minor children of the decedent can receive the support intended by the Nevada Legislature. This is yet another benefit in establishing residency in Nevada for estate and tax planning purposes.
Christopher J. Phillips, Esq.
